Weinstein Co. completes $289-million sale to private equity company
Goodbye, Weinstein Co. Hello, Lantern Entertainment.
On Monday, the beleaguered studio roiled by sexual assault allegations against its co-founder Harvey Weinstein completed the sale of its assets to Lantern Capital Partners, closing the book on the onetime indie film powerhouse.
Lantern paid $289 million for the assets, including Weinstein Co.’s 277-film library. The Dallas-based private equity firm previously agreed to pay $310 million, but managed to secure a discount after agreeing to make payments on the studio’s contracts with filmmakers and actors.
A bankruptcy judge approved the revised deal Wednesday, over the objections of Hollywood heavyweights such as Quentin Tarantino and Bradley Cooper, who worried that the deal terms might keep them from being paid royalties owed for films such as “The Hateful Eight” and “Silver Linings Playbook.”
The new owners, who have no entertainment business experience, must now figure out how to use the assets to build a new film and TV company, known as Lantern Entertainment.
All but one of the remaining members of the New York-based studio’s board of directors — including Harvey Weinstein’s brother, co-founder Bob Weinstein — resigned after completing the transaction. The younger Weinstein served as the lone chairman of the studio’s board after Harvey Weinstein was fired in October.
The depleted board also included Tunisian media executive Tarak Ben Ammar and WPP executive Lance Maerov.
The only board member remaining is Ivona Smith, a financial professional who joined in April to guide the company through its bankruptcy proceedings.
“In the face of intense public scrutiny, this board steered the company to an orderly sale and maximized value for the company and its creditors,” Smith said in a Thursday statement.
Weinstein Co. filed for Chapter 11 bankruptcy protection in March with less than $500,000 in cash and a barrage of lawsuits, including a civil rights case from the New York attorney general’s office.
Weinstein Co.’s bankrupcty filing came after a $500-million deal to sell to Ron Burkle’s Yucaipa Cos. and former Obama official Maria Contreras-Sweet collapsed.
Yucaipa on Monday sued Lantern in Los Angeles County Superior Court, accusing the company of fraud and breach of contract. The 12-page complaint said Lantern had failed to compensate Yucaipa for providing confidential information about Weinstein Co., which it obtained while doing due diligence for the potential deal.
Yucaipa said Lantern had agreed to pay a 2% transaction fee worth nearly $6 million and reimburse Yucaipa’s costs and expenses in an unspecified amount.
“Virtually all of Lantern’s knowledge about TWC was obtained by leveraging the due diligence conducted and paid for by Yucaipa,” the lawsuit said.
Lantern did not immediately comment on the lawsuit.
The studio was also hit with layoffs last week. Fewer than 50 of the remaining 70 employees will be offered jobs with the new company, said a person familiar with the matter who was not authorized to comment. Last year, the company had as many as 150 full-time staffers.
Twitter: @rfaughnder
UPDATES:
5:50 p.m.: This article was updated with Yucaipa Cos.’ lawsuit against Lantern Capital Partners.
This article was originally published at 10:10 a.m.
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